Last week Wall Street took a kidney punch that had it coughing up blood in the form of bankruptcy and hemorrhaging with mergers, bailouts, and takeovers. It was so bad that the media took to calling it Black Sunday.
Here's what happened: Lehman Brothers (one of the nation's large investment banks) went belly-up--it was 158 years old. That's right, it made it through the Great Depression, but went bankrupt during the mortgage market crisis (PS: it was the biggest bankruptcy in history). Following LB's downfall, Merrill Lynch (another huge investment bank) sold out to Bank of America to keep from going under. Then AIG ("one of the world's largest insurers") had to take an $85 billion loan from the federal government to keep from kicking the bucket--the government now owns 80 percent of the company, a situation that shareholders are not happy about. In other words, things are pretty bad right now. So bad that the government is having to step in to save the day. Right now, Congress is processing a $700 billion bailout plan for Wall Street. This means that the government is becoming more and more involved with numerous aspects of the U.S. financial system, which in turn means that the government is being granted more and more power. In fact, the government's introduction into financial areas typically free from government influence is so radical that it even has Democrats (traditionally the champions of bigger government) worried. Whether you think big government is good or bad is a personal matter, but it's sad that the government has to step in in such a big way in the first place. As this blog points out, these symptoms of collapse have been brought about by a widespread failure of economic practices by both unscrupulous lenders and ignorant/greedy "have to have it now" borrowers. The financial system is reaping what it sowed. It's time to start replanting wisely. If we live and spend responsibly we won't find ourselves in these kinds of situations. For now, wish Wall Street luck, spend wisely on Main Street, and work towards a return to a financial Easy Street.
--Jens
I'm against the $85,000,000,000.00 bailout of AIG.
>
> Instead, I'm in favor of giving $85,000,000,000 to America in a We Deserve
> It Dividend.
>
> To make the math simple, let's assume there are 200,000,000 bonafide U.S.
> Citizens 18+.
>
> Our population is about 301,000,000 +/- counting every man, woman and child.
> So 200,000,000 might be a fair stab at adults 18 and up..
>
> So divide 200 million adults 18+ into $85 billon that equals $425,000.00.
>
> My plan is to give $425,000 to every person 18+ as a We Deserve It Dividend.
>
>
> Of course, it would NOT be tax free.
>
> So let's assume a tax rate of 30%.
>
> Every individual 18+ has to pay $127,500.00 in taxes.
>
> That sends $25,500,000,000 right back to Uncle Sam.
>
> But it means that every adult 18+ has $297,500.00 in their pocket.
>
> A husband and wife team has $595,000.00.
>
> What would you do with $297,500.00 to $595,000.00 in your family?
>
> Pay off your mortgage - housing crisis solved.
>
> Repay college loans - what a great boost to new grads
>
> Put away money for college - it'll be there
>
> Save in a bank - create money to loan to entrepreneurs.
>
> Buy a new car - create jobs
>
> Invest in the market - capital drives growth
>
> Pay for your parent's medical insurance - health care improves
>
> Enable Deadbeat Dads to come clean - or else
>
> Remember this is for every adult U S Citizen 18+ including the folks who
> lost their jobs at Lehman Brothers and every other company that is cutting
> back. And, of course, for those serving in our Armed Forces.
>
> If we're going to re-distribute wealth let's really do it...instead of
> trickling out a puny $1000.00 ("vote buy") economic incentive that is being
> proposed by one of our candidates for President.
>
> If we're going to do an $85 billion bailout, let's bail out every adult U S
> Citizen 18+!
>
> As for AIG - liquidate it.
>
> Sell off its parts.
>
> Let American General go back to being American General.
>
> Sell off the real estate.
>
> Let the private sector bargain hunters cut it up and clean it up.
>
> Here's my rationale. We deserve it and AIG doesn't.
>
> Sure it's a crazy idea that can "never work."
>
> But can you imagine the Coast-To-Coast Block Party!
>
> How do you spell Economic Boom?
>
> I trust my fellow adult Americans to know how to use the $85 Billion
>
> We Deserve It Dividend more than do the geniuses at A IG or in Washington DC .
>
>
> And remember, The Birk plan only really costs $59.5 Billion because $25.5
> Billion is returned instantly in taxes to Uncle Sam.
>
> Ahhh...I feel so much better getting that off my chest.
>
> Kindest personal regards,
>
> Birk
>
> T. J. Birkenmeier,
Chris, thanks for the comment. I like the premise of T.J.'s idea, but 85 billion divided by 200 million equals 425, not 425,000, so the math doesn't work out. Also, it's really easy to find specific information out about the U.S. population at census.gov, so T.J. didn't have to guess.
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